EMPLOYMENT AGREEMENT BETWEEN BLUEGATE CORPORATION AND STEPHEN J. SPERCO
BETWEEN
BLUEGATE CORPORATION AND ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
This
Employment agreement (the “Agreement”)
is made
effective as of the 31st
day of
December 2006,
by
and between Bluegate
Corporation,
a Nevada corporation (“Bluegate”),
and
▇▇▇▇▇▇▇
▇.
▇▇▇▇▇▇ (the
“Executive”).
WHEREAS,
The Executive is willing to be employed by Bluegate from and after the effective
date on the basis and the terms and conditions set forth in this
Agreement.
THEREFORE,
upon the mutual promises and covenants of the parties, and other good
and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending
to be legally bound, the parties agree as follows:
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1.
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Employment.
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Bluegate
hereby employs the Executive, and the Executive hereby accepts such employment,
for
the
period stated in section 3. of this Agreement and upon the other terms and
conditions herein
provided.
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2.
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Position
and Duties.
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During
the Employment Period the Executive agrees to serve as Chief Operating Officer
(“COO”)
of Bluegate. In
his capacity of COO, the Executive will perform such duties and responsibilities
for Bluegate as may from time to time be assigned to him by the Board of
Directors of Bluegate. The Executive shall have no responsibility for payroll
or
for the filing of
any
payroll tax return, or for the payment of any tax of any kind that may be
due or
payable
by Bluegate or any of its divisions.
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3.
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Term.
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By
this
Agreement, Bluegate employs the Executive, and the Executive accepts employment
with
Bluegate, for a period consisting of two (2) years, commencing on the date
of
this Agreement.
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4.
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Compensation.
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a.
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Salary.
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In
consideration of such service, Bluegate agrees to pay the Executive as
compensation an annual salary in accordance with Bluegate's regular payroll
practices in effect from time
to
time. For the term of the Agreement, the amount of the annual salary paid
to the
COO
shall
be equal to salary paid to the President of Bluegate at the commencement
date
of
this
Agreement ($150,000.00/year) and be modified from time to time in conjunction
with any positive adjustments made to the salary of the Bluegate
President.
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b.
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Stock
Options.
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In
addition to the compensation set forth above, the Executive shall be entitled
to
receive options to purchase the following number of Bluegate shares of common
stock, par value $.001 per share, (“Option
Shares”) pursuant
to a
Stock Option Agreement on the date and at the option price set out
below:
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DATE
OF GRANT
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OPTION
SHARES
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OPTION
PRICE
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||
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December
31, 2006
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1,200,000
shares
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$0.95
per share
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The
Option Shares to be issued pursuant to this Agreement shall be restricted
securities with
piggy back registration rights, and shall terminate becoming invalid after
the
expiration
of five (5) years from the date of grant. Additionally, 600,000 of the Option
Shares
shall vest immediately as of the Date of Grant, and the remaining 600,000
Option
Shares
shall vest 25,000 each month, beginning January 1, 2007 through and including
December
1, 2008.
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c.
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Bonus.
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In
addition to the compensation set forth above, Executive and Bluegate agree
to
enter into good
faith negotiations with a view to reaching an agreement on the payment of
one or
more bonuses
(the "Bonuses") in such amounts as are mutually agreed upon by Executive
and
Bluegate,
if major transactions or milestones (such as acquisitions and financings)
agreed
mutually
upon by them shall be achieved. The Bonuses shall be payable at such time
as is
mutually
agreed upon by Executive and Bluegate.
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5.
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(Intentionally
Left Blank)
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6.
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Confidentiality.
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In
the
course of the performance of Executive's duties hereunder, Executive recognizes
and
acknowledges that Executive may have access to certain confidential and
proprietary information
of Company or any of its affiliates. Without the prior written consent of
Company,
Executive shall not disclose any such confidential or proprietary information
to
any
person or firm, corporation, association, or other entity for any reason
or
purpose
whatsoever, and shall not use such information, directly or indirectly, for
Executive's own behalf or on behalf of any other party. Executive agrees
and
affirms that
all
such information is the sole property of Company and that at the termination
and/or expiration of this Agreement, at Company's written request, Executive
shall promptly return to Company any and all such information so requested
by
Company.
The
provisions of this Section shall not, however, prohibit Executive from
disclosing to Others
or
using in any manner information that:
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(1)
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has
been published, or has become part of the public domain other than
by
acts,omissions, or fault of
Executive;
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(2)
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has
been furnished or made known to Executive by third parties (other
than
those acting
directly or indirectly for or on behalf of Executive) as a matter
of legal
right without restriction on its use or
disclosure;
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(3)
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was
in the possession of Executive prior to obtaining such information
from
Company
in connection with the performance of this Agreement;
or
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| (4) |
is
required to be disclosed by law.
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7.
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Indemnification.
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The
Company shall to the full extent permitted by law or as set forth in the
Articles of Incorporation
and the Bylaws of the Company, indemnify, defend and hold harmless Executive
from and against any and all claims, demands, liabilities, damages, losses
and
expenses (including reasonable attorney's fees, court costs and
disbursements)
arising
out of the performance by him of his duties hereunder except in the case
of his
willful
misconduct.
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8.
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Termination.
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This
Agreement and the employment relationship created hereby will terminate (1)
with
cause
under Section 8.a.; or (2) upon the voluntary termination of employment by
Executive
under Section 8.b.
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a.
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With
Cause.
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The
Company may terminate this Agreement at any time because of (i) the determination
by the Board of Directors in the exercise of its reasonable judgment that
Executive has committed an act or acts constituting a felony or other crime
involving
moral turpitude, dishonesty or theft or fraud; or (ii) Executive's willful
misconduct
in the performance of his duties hereunder, provided, in each case, however,
that the Company shall not terminate this Agreement pursuant to this Section
unless the Company shall first have delivered to the Executive, a notice
which
specifically identifies such breach or misconduct and the executive shall
not
have
cured the same within fifteen (15) days after receipt of such
notice.
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b.
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Voluntary
Termination.
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The
Executive may terminate his employment voluntarily.
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c.
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Obligations
of Company Upon Termination.
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In
the
event of the termination of Executive's employment pursuant to Section 8.a.
or
b.,
Executive will be entitled only to the compensation earned by him hereunder
as
of
the
date of such termination (plus any life insurance benefits). In the event
of the
termination
of Executive's employment for any reason other than Section 8.a. or b. as
described
immediately above, all compensation of every nature described in this
Agreement
shall immediately vest and become due and owing to Executive.
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d.
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Survivorship.
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In
the
event of the Death of the Executive prior to the end of the Term of this
Agreement,
Executive's spouse shall be entitled to receive Compensation pursuant to
this
Agreement through the end of its Term as it accrues.
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9.
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Waiver
of Breach.
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The
waiver by any party hereto of a breach of any provision of this Agreement
will
not operate
or be construed as a waiver of any subsequent breach by any party.
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10.
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Arbitration.
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If
a
dispute should arise regarding this Agreement the parties agree that all
claims,
disputes,
controversies, differences or other matters in question arising out of this
relationship
shall be settled finally, completely and conclusively by arbitration in
Houston,
Texas in accordance with the Commercial Arbitration Rules of the American
Arbitration
Association (the "Rules"). The governing law of this Agreement shall be the
substantive
law of the State of Texas, without giving effect to conflict of laws. A
decision
of the arbitrator shall be final, conclusive, and binding on the Company
and
Executive.
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11.
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Covenant
Not to Compete.
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a.
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So
long as the Executive is employed by the Company and for a period
of
eighteen (18)
months after either: (1) the voluntary termination of employment
by
Executive, or
(2) the termination of the Executive by the Company for cause,
as set
forth in Section
8.a. hereof, the Executive specifically agrees that he will not,
for
himself, on behalf
of, or in conjunction with any person, firm, corporation or entity,
other
than the Company
or a Sperco Company in existence at the time and date of the beginning
of
the
agreement (either as principal, employee, shareholder, member,
director,
partner, consultant,
owner or part-owner of any corporation, partnership or any type
of
business
entity) anywhere in any county in which the Company is doing business
at
the time of termination, directly or indirectly, own, manage, operate,
control, be employed
by, participate in, or be connected in any manner with the ownership,
management,
operation, or control of any business similar to the type of business
conducted
by the Company at the time of termination of the Executive's employment.
For
the purpose of this Agreement, a "Sperco Company" shall be any
company
owned
or operated by the Executive, including any successor or assigns
of those
companies.
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b.
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Executive's
Acknowledgments and Agreements.
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The
Executive acknowledges and agrees that:
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i.
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Due
to the nature of the Company's business, the foregoing covenants
place no
greater
restraint upon the Executive than is reasonably necessary to protect
the
business
and goodwill of the Company;
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ii.
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These
covenants protect a legitimate interest of the Company and do not
serve
solely
to limit the Company's future competition;
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iii.
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This
Agreement is not an invalid or unreasonable restraint of trade;
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iv.
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A
breach of these covenants by the Executive would cause irreparable
damage
to
the Company;
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v.
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These
covenants will not preclude the Executive from becoming gainfully
employed
following termination of employment with the
Company;
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vi.
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These
covenants are reasonable in scope and are reasonably necessary
to protect
the
Company's business and goodwill and valuable and extensive trade
which
the
Company has established through its own expense and
effort;
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vii.
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The
signing of this Agreement is necessary for the Executive's
employment;
and
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viii.
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He
has carefully read and considered all provisions of this Agreement
and
that all
of the restrictions set forth are fair and reasonable and are reasonably
required
for the protection of the interests of the
Company.
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c.
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Remedies,
Injunction.
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In
the
event of the Executive's actual or threatened breach of any provisions of
this
Agreement,
the Executive agrees that the Company shall be entitled to a temporary
restraining order, preliminary injunction, and/or permanent injunction
restraining and enjoining
the Executive from violating the provisions herein. Nothing in this Agreement
shall be construed to prohibit the Company from pursuing any other available
remedies for such breach or threatened breach, including the recovery of
damages
from the Executive. The Executive further agrees that for the purpose of
any
such
injunction proceeding, it shall be presumed that the Company's legal
remedies
would be inadequate and that the Company would suffer irreparable harm as
a
result
of the Executive's violation of the provisions of this Agreement. In any
proceeding
brought by the Company to enforce the provisions of this Agreement, no
other
matter relating to the terms of any claim or cause of action of the Executive
against
the Company will be defense thereto. The foregoing remedy provisions are
subject
to the provisions of §15.51 of the Texas Business and Commerce Code, as
amended
(the "Code"), which Code provisions shall control in the event of any
conflict
between the provisions hereof and the Code or any other law in effect
relevant
and applicable hereto.
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| 12. |
Benefits
Insurance.
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a.
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Medical,
Dental and Vision Benefits.
During this Agreement, Executive and his dependents will be entitled
to
receive such group medical, dental and vision benefits as
Company may provide to its other executives, provided such coverage
is
reasonably available, or be reimbursed if Executive is carrying
his own
similar insurance.
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b.
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Benefit
Plans.
The Executive will be entitled to participate in any benefit plan
or program
of the Company, which may currently be in place or implemented
in the
future.
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| c. |
Other
Benefits.
During the Term, Executive will be entitled to receive, in addition
to and
not in lieu of base salary, bonus or other compensation, such other
benefits and normal perquisites as Company currently provides or
such
additional benefits as the Company
may provide for its executive officers in the
future.
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| 13. |
Vacation
and Sick Leave.
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a.
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Vacation
Pay.
The Executive shall be entitled to an annual vacation leave of
four (4)
weeks
at full pay. Executive is specifically permitted to work from home
or
other remote location in his discretion, which time shall not be
considered as vacation leave.
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| b. |
Sick
Pay.
The Executive shall be entitled to sick leave as
needed.
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14.
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Reimbursement
of Expenses.
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Upon
submission of a detailed statement and reasonable documentation, Company
will
reimburse
Executive in the same manner as other executive officers for all reasonable
and
necessary or appropriate out-of-pocket travel and other expenses incurred
by
Executive in rendering services required under this Agreement. Executive
shall
be entitled
to: (1) $750 per month transportation allowance, and (2) up to a $1,000 per
month
discretionary expense account.
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15.
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Withholding
of Taxes.
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Bluegate
may withhold from any payments under this Agreement all applicable taxes,
as
shall be required pursuant to any law or governmental regulation or
ruling.
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16.
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Entire
Understanding.
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This
Agreement sets forth the entire understanding between the parties with respect
to the subject
matter hereof and cancels and supersedes all prior oral and written agreements
between the parties with respect to the subject matter hereof.
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17.
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Severability.
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If
for
any reason any provision of this Agreement shall be held invalid, such
invalidity shall
not
affect any other provision of this Agreement not held so invalid.
| 18. |
Governing
Law.
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This
Agreement has been executed and delivered in the State of Texas and its
validity, interpretation, performance and enforcement shall be governed by
and
construed in accordance with the laws thereof applicable to contracts executed
and to be wholly performed
in Texas.
| 19. |
Notices.
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All
notices shall be in writing and shall have been duly given if delivered by
hand
or mailed,
certified or registered mail, return receipt requested to the following address
or to such
other address as either party may designate by like notice:
If
to Executive:
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
Two
Prudential Plaza, Suite 700
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If
to Bluegate:
Attn:
Chairman of the Board of Directors
▇▇▇
▇.
▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Bluegate
has caused this Agreement to be executed by its officer and the Executive
has
signed
this Agreement.
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20.
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Successors,
Binding Agreement.
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This
Agreement is binding upon Bluegate's successors. Bluegate will require any
successor
(whether direct or indirect, by purchase, merger, consolidation, or otherwise)
to all
or
substantially all of the business and/or assets of Bluegate to expressly
assume
and agree
to
perform this Agreement in the same manner and to the same extent that Bluegate
would
be
required to perform it as if no such succession had taken place. Failure
of
Bluegate
to obtain such assumption and agreement prior to the effectiveness of any
such
succession
shall constitute a breach of this Agreement.
This
Agreement shall inure to the benefit of both Bluegate and its successors
and
assigns and
the
Executive and his personal or legal representatives, executors, administrators,
heirs,
distributes, successors and assigns.
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BLUEGATE
CORPORATION:
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EXECUTIVE:
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/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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/s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
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CEO
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